Delegation of Authority Template Generator

Why Every Business Needs a Delegation of Authority Framework

A Delegation of Authority (DoA) matrix is one of the most critical internal controls in any organisation. It defines who has the authority to commit the business financially - approving invoices, signing purchase orders, authorising expenses, and committing to contracts. Without a clear DoA, businesses face uncontrolled spending, fraud risk, audit failures, and operational confusion about who can approve what.

For Australian businesses, a well-documented DoA is not just good governance - it is often required. Auditors expect to see documented authority levels as part of internal controls testing. Boards have a fiduciary duty to ensure appropriate financial controls are in place. And practically, AP teams need clear rules to know whether an invoice approval is valid or needs to be escalated before payment is released.

The most effective DoA frameworks are simple, unambiguous, and enforced through systems rather than relying solely on manual compliance. When authority limits are configured in your AP automation or ERP system, invoices above a threshold are automatically routed to the correct approver - eliminating the risk of someone approving beyond their authority or an AP clerk needing to manually check limits on every transaction.

How to use this template generator

1. Enter your company details including ABN and version number for document control.
2. Add authority levels for each role - use the "Standard SMB" quick-fill for a common starting point, then customise to your structure.
3. Define which transaction types each role can approve (invoices, POs, expenses, payroll) and the dollar limit.
4. Set co-signature thresholds and escalation paths so everyone knows what happens when a transaction exceeds their authority.
5. Add any special conditions (e.g. related party transactions always require board approval).
6. Download as PDF for board approval, then configure the same limits in your AP system.

What should authority limits be based on?

Authority limits should reflect the risk appetite of the organisation, the seniority and accountability of each role, and the practical needs of the business. A common approach is to set limits at levels that allow 80-90% of routine transactions to be approved without escalation, while ensuring high-value or unusual transactions receive appropriate oversight. Limits should be reviewed at least annually and updated when roles change or the business scales.

How often should the DoA be reviewed?

Best practice is to review the DoA annually at minimum, or whenever there is a significant organisational change (new senior hires, restructures, acquisitions). Many businesses review quarterly to ensure limits remain appropriate as the business grows. The review should be documented and approved by the board or senior leadership team, with the updated version distributed to all relevant staff and configured in financial systems.